HARARE - Platinum producer Mimosa says its revenue declined by 32 percent to $99 million in the half year to December 2015 due to lower metal prices.
This comes as mining companies have sought to maximise lower-cost output as the commodities downturn has deepened.
From $1,221 per ounce a year ago, platinum hit a seven-year nadir of $821 per ounce on January 21. It has since recovered to more than $900 per ounce.
Mimosa — jointly owned by South Africa’s Aquarius Platinum (Aquarius) and Impala Platinum — also saw its production decreasing by six percent to 1,238 million tonnes.
However, the Zvishavane-based miner’s production in the period under review went up two percent to 60 214 platinum group metals (pgm) ounces, compared to the previous comparable period.
Aquarius chief executive Jean Nel said Mimosa recorded earnings before interest, taxes, depreciation and amortization (Ebitda) profit attributable to Aquarius of $4 million and a net loss before tax of $51 million.
“Despite consistent production, the 83 percent decrease from $27 million to $4 million in Ebitda compared to the previous comparable period was driven by lower pgm prices (down 26 percent), higher production (up two percent), and lower unit costs (down two percent).
Nel noted that the lower pgm prices experienced during the half year significant impaired both Kroondal and Mimosa’s profitability.
“In order to ensure sustainability in this macro environment — United States dollar pgm prices fell to the lowest level in more than a decade — further cost saving initiatives were implemented at Kroondal, and specifically Mimosa, which management expects to result in unit costs reducing further going forward,” he said.
Meanwhile, Aquarius said its Kroondal mine in South Africa and Mimosa in Zimbabwe produced a combined 352 107 ounces of platinum group metals in the six months to December.
Aquarius’s attributable production including 6 858 ounces from the Platinum Mile tailings re-treatment operations, was 182 911 ounces.
Average realised platinum group metals prices fell 29 percent compared with last year in dollar terms, but were 13 percent lower in rand terms, as the rand weakened 23 percent against the dollar.
The loss attributable to Aquarius shareholders rose by a third to $76,1 million. At the end of December, Aquarius held $42 million in cash after purchasing $125 million of convertible bonds.
Nel said Kroondal processed slightly lower volumes, but extracted more platinum because of higher head grades and better recoveries.
Major platinum miners are expected to negotiate wage agreements this year, which has previously disturbed labour relations. Nel said the Kroondal workforce had maintained “a positive outlook, with open communications channels on all levels”.
He said industrial relations at Mimosa were “cordial”.